Biggest IPO in six years is expected to raise about S$2.3 billion in fresh capital. For the whole of 2016, total capital raised was S$2.3 billion; a year before that, it was S$0.5 billion.
A man at the Singapore Exchange (SGX) on July 27, 2016. (File photo: AFP/Roslan Rahman)
SINGAPORE: Analysts are upbeat about Singapore’s initial public offer (IPO) market in the second half of the year, with the upcoming NetLink NBN Trust IPO expected to bring total capital raised to S$2.8 billion this year.
This will exceed 2016's S$2.3 billion and the S$0.5 billion posted in 2015.
NetLink Trust is the biggest IPO in six years and is expected to raise about S$2.3 billion in fresh capital. On July 10, it announced its IPO offering price at S$0.81 per unit, which values the market capitalisation of the trust at about S$3.1 billion. NetLink Trust is the fibre broadband business unit of telco operator SingTel.
Earlier IPOs in Singapore this year included the listing of coffee shop operator Kimly, as well as events production firm UnUsUaL Limited.
Deloitte Singapore’s Dr Ernest Kan said the familiarity of these companies is one reason why their IPOs have done well.
“In fact, to back that up, just two years ago when we look at another listing like Jumbo, which got listed in November 2015 – ending first day of trading – 36 per cent increase in the share price,” said Dr Kan, who is the audit firm’s deputy managing partner (markets). “So that’s another household name, very famous, and people tend to relate to this stock better.”
Kimly and UnUsUaL are the two best performing among new issues this year, with Kimly up 52 per cent from its initial offer price of 25 cents, and UnUsUaL Limited at more than 150 per cent higher than its offer price of 20 cents at the close of markets on July 14. Majority of the other new counters are also trading above its offer price.
KGI Securities research analyst Joel Ng said that looking at just the first half of 2017, the higher number of IPOs in the period could be attributed to bullish market sentiment.
“I think what we’re seeing is that the rally in equity markets, people are feeling more bullish, and this is on the backdrop of global recovery in economic growth. There is a subdued concern on trade wars, so that has eased concerns on the global economic growth."
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